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Whole Life Insurance

Whole life insurance plans are a type of life insurance plan which provides insurance coverage to the policyholder for the whole life i.e. up to 100 years of age, provided the policyholder pays the premiums of the policy on time. A whole life insurance plan offers guaranteed death benefit to the beneficiary of the policy in the event of unfortunate demise of the policyholder during the tenure of the policy. The insurance holder can decide the sum assured amount at the time of policy purchase.

Under whole life insurance plan if the policyholder survives up to 100 years of age, then matured endowment coverage is provided to the policyholder as maturity benefit.

A whole life insurance policy covers as long as you live. As it offers risk coverage for the entire life, it is called whole life policy. It offers dual benefit of life coverage and bonus. The premium is paid for the first 10-15 years and the insurance cover is extended till the entire life of the insured. For instance, if you are 30 years old and you opt for the whole life plan whose sum assured is Rs 30 lakh, then you would stop paying premium when you are 45 years of age but the coverage would last for your entire life. The premium is paid only for a limited duration and therefore, it is high.

How Does Whole Life Insurance Works?

Whole life insurance is a specifically designed life insurance plan which aims to provide whole life coverage to the insured so that they can live a financially secured life and create a financial cushion for the future.

 The whole life insurance policy provides death benefit along with maturity and survival benefit to the policyholder. Whole life insurance plans come in different variants. According to the one’s own requirement and suitability, the insured can choose from different types of whole life insurance offered by the insurance companies.     

Every year, insured pays a premium. Out of this, a portion is used for providing protection and the remaining stays invested in the company. If a profit is earned, policyholder is entitled to get the bonus on the invested amount. The investment grows in value and is returned to the policyholder if he chooses to withdraw or lives till the maturity of the plan.

To sum up, whole life plans give life cover for the entire life and help build a corpus. It is good to include this option in your investment portfolio.

Features of Whole Life Policy

The policy provides insurance coverage to the policyholder for the entire life. Upon death of a policyholder, insurance payout is made to the nominee. It comes loaded with following features:

1. Death Benefit

In the event of the uncertain demise of the insurance holder during the tenure of the policy, the death benefit is paid to the nominee. The death benefit is paid as a total sum assured amount to the beneficiary of the policy by the insurance company, provided all the premiums of the policy are dully paid.

2. Guaranteed Premium

Under the whole life insurance policy, the premium rate of the policy is set for the entire tenure of the policy and does not increase or decrease throughout the term period of the policy. So, if the insured pays a premium of Rs.2500 per month, then he/she will continue to pay the same premium for the whole tenure of the policy.

3. Protection for Life

Whole life insurance plan is specifically designed to provide life protection to the family of the insured in the form of payment of guaranteed sum assured along with bonuses if any in the of policyholder’s demise.

4. Tax Benefit

The premium paid towards the policy and maturity proceeds is tax exempted under section 80C and 10(10D) of Income Tax Act 1961.

5. Loan Facility

After the completion of 3 years of policy, the insurance holder can avail loan against the policy.

Benefits of Whole Life Insurance Policy

Whole Life Coverage

Whole life insurance provides coverage to the policyholder until 100 years of age. The policy provides protection to the insured until death. 

Guaranteed Life Coverage

The whole life insurance assures the financial security of the family and the loved ones even in the absence of the breadwinner of the family.

Periodic Payments

At the time of policy maturity, the policyholder receives the lump-sum amount as maturity benefit along with the bonuses, if any. Moreover, some of the whole life insurance plans also offers maturity benefit in form of regular income. Thus, at the time of maturity of the policy, the insured can choose the avail the maturity benefit as a lump-sum amount at one go or as regular income at specific intervals of time.

Tax Benefits

The insured can avail tax exemption under section 80C on the premium paid towards whole life insurance policy. Moreover, the maturity claims are also tax exempted under section 10(10D) of ITA 1961.

Serves as a Source of Cash

According to the experts it is suggested that the individuals should save funds for future so that they can deal with the eventualities of life. However, creating a large corpus at a small span of time is not an easy task, with the help of whole life insurance plan one can secure their future financially and can achieve their long-term financial goals of life. 

Offers Loan Facility

As whole life insurance provides protcetion up to 100 years of age, the policyholder can opt for loan facility against the plan. However, loan can only be availed if the insured completes 3 policy years and if all the premiums of the policy are dully paid.

Benefits the Dependents of the Plan

Whole life insurance policy is a great option of investment in order to provide financial security to the family. For example, if an individual opt a whole-life plan then both the spouse will get an extra financial coverage that can be used at the time of retirement as retirement fund. In case, of decease of one of the partner, the policy will provide death benefit to the beneficiary of the policy. 

Further, the policy of the spouse will works as a financial backup for the children after the demise of the insured person. Thus, whole-life insurance is a great option of insurance coverage in terms of wealth creation and future planning, so that one can provide financial security and good lifestyle to their family.

Types of Whole Life Insurance Plans

A whole life insurance policy is a type of life insurance policy. Whole life insurance protects the insured against death, whenever it may happen. It means that there is no fixed term under whole life insurance. Most policies provide a dividend to the policyholder which helps with retirement. Whole life policies provide insurance until the death of the insured person. Whole life policies are classified into.

Non-Participating Whole Life Insurance

This is a low-cost life insurance policy which offers the feature of face amount and level premium. As a non-participating policy, the plan does not pay any dividend and nor does receive any bonus facility.

Participating Whole Life Insurance

On contrary to the non-participating whole life insurance plan, participating life insurance plan offers the benefit of bonuses. Under this plan, the premium paid by the insured is invested by the company; the profit earned through the investment is paid as bonuses to the insured.

Pure Whole Life Insurance

Under this plan option, the premiums are paid continuously throughout the life of the insured until death. Risk coverage is for the entire duration of life and the sum assured is paid after the death of the insured.

Limited Payment Whole Life Insurance

Under this plan option, the policyholders are required to pay the premium of the policy regularly for the entire tenure of the plan. The premium of the policy remains constant for the whole tenure of the plan.

 Where the insured pays a fixed number of premiums for a specific number of years or till he/she reaches a specific age. Risk coverage is however throughout the life of the insured.

Single Premium Whole Life Insurance

Under this plan option, the entire premium of the policy is paid at one go. Under this plan option, a large sum assured amount is paid as a guaranteed payment to the beneficiary of the policy.

Best Whole Life Insurance Policies in India

Plans

Entry Age

Maturity Age

Policy Term

Sum Assured

Max Life Whole life Super

Minimum-18 yearsMaximum- 50 years

100 years

Up to 100 years of age.

Minimum-Rs.50,000Maximum- No upper limit

SBI Life Subh Nivesh

Minimum- 18 yearsMaximum- 58 years,  60 years

65 years

15 years ( Extended life cover up to 100 years)

Minimum-Rs.75,000 (x1000/-)Maximum- No upper limit

HDFC Life Sampoorn Samridhi Plus

Minimum- 30 daysMaximum-60 years

75 years

15-40 years

Minimum-Rs.65,463Maximum- no upper limit

IDBI Federal  whole Life Insurance

Minimum-18 yearsMaximum- 55 years

100 years

100 years

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 1. Max Life Whole life Super Plan

This is a participating whole life insurance policy which provides whole life insurance coverage to the policyholder up to 100 years of age.  The plan also offers bonus facility to the insured. With higher insurance coverage, this plan is best suitable for individuals who want to secure the financial future of the family and loved ones.

2. SBI Life Subh Nivesh

This is a non-linked with profit endowment assurance plan that offers full life coverage to the insurance holder. The plan allows the policyholder to save regularly in order to create a financial cushion for the future. The plan also provides maturity benefit along with bonuses, if any if the insured survives the entire tenure of the policy.

3. HDFC Life Sampoorn Samridhi Plus

This plan provides an option to the policyholder to choose between endowment and endowment whole-life insurance policy. As a limited premium payment endowment policy, the plan provides the option to extend the life cover up to 100 years of age. Along with the benefit of life coverage the plan also offers the facility to save on taxes. This plan is best suitable for individuals who want to provide financial security to their loved ones.

4. IDBI Federal Whole Life Insurance

This is a whole life savings insurance plan which provides life coverage to the insurance holder up to 100 years of age. Under this plan option, a lump sum amount is paid to the insurance holder as maturity benefit at the end of the policy tenure. Along with the benefit of life protection, the plan also offers bonuses as guaranteed additional bonus or reversionary bonus, if any.

Who Should Opt for Whole Life Insurance Policy?

Whole life insurance plans is an appropriate form of a life insurance plan for most of the individuals. Every salaried individual should plan to provide financial security to their loved ones and family.

  • Individuals who want to create a financial cushion for the future.
  • This plan is a great option of investment for individuals who want to gain a return on investment along with the benefit of life coverage.
  • The individuals who want to accumulate wealth for retirement should consider buying a whole life insurance policy.
  • This plan is a good investment option of investment as it provides an opportunity to save on taxes along with the benefit of life coverage.

Bottom Line!

The Whole Life Insurance plan is very important to have for every individual. By without having a proper insurance coverage one can always be exposed to financial uncertainties of life. Thus, in order to safeguard the family financially it is very important to have a life insurance plan. However, in order to choose the best whole life insurance plan, one can compare various plans online and zero in on a plan.